Critical procurement deals for fighter jets, munitions, and space programs are being delayed by a budget dispute involving the Finance Ministry, Walla learned on Tuesday.
After nearly three years of intense fighting on several fronts, the IDF and Defense Ministry's budget shortfall is estimated at about NIS 40 billion, largely due to ongoing operational expenses, particularly payments for reserve duty days.
Against this backdrop, there is criticism within the military of the IDF Manpower Directorate over what is seen as inefficient management of the allocation of reserve duty days, and the directorate has been required to make sharper cuts.
The number of reservists serving has reached a daily average of 51,000 soldiers, while the current target is 45,000 reservists. The goal is then to reduce the number to 40,000, depending on diplomatic progress in the Gaza Strip and Lebanon.
Prime Minister Benjamin Netanyahu acknowledged the budget gap and instructed officials approximately five weeks ago to immediately transfer NIS 12 billion, followed by another NIS 3 billion. The funds have not yet been transferred.
Fighter jet purchases held up by budget mechanism
The Finance Ministry has argued that the remaining NIS 25 billion gap should be deferred to a budgetary arrangement expected around October or November.
A second pressing issue is Netanyahu's decision to approve NIS 350 billion for military force buildup. Following another in-depth discussion, it was approved that, in the first stage, the IDF and Defense Ministry would enter into contracts with defense industries worth NIS 131 billion.
The funding is intended in particular to advance the purchase of two fighter jet squadrons: a fourth F-35 squadron and a second F-15 squadron.
The process, however, has become tied to the "numerator," a budgetary oversight mechanism used to measure the deficit over the coming three years. No decision has yet been made regarding the mechanism, and as a result, all of the sensitive procurement deals are being delayed.
Walla learned that the delay stems from a Finance Ministry demand that Netanyahu advance legislation increasing the numerator due to the widening budget deficit.
The IDF and Defense Ministry are pressing the government to move the issue forward because several critical procurement deals are currently on the table, including aircraft munitions, fighter jets, attack helicopters, space-related development projects, and other systems.
Defense officials warn that if the contracts are not signed within the next two weeks, Israel's places on production lines could be allocated to other countries. The Knesset is also expected to disperse ahead of a recess, while the upcoming elections are expected to have political implications for the process, potentially causing a significantly longer delay.
Apache budget approved as other procurement remains stalled
The delays come amid gaps that have already developed in Israel's munitions inventories, while the Israel Air Force's order of battle is aging. This is even before addressing force buildup for the ground forces, which includes thousands of new jeeps and additional armored vehicles.
Walla also learned that the budget framework for the purchase of new Apache attack helicopters has been approved. However, the IDF considers advancing the legislation needed for munitions, space development projects, and fighter aircraft to be substantially more urgent.
So far, talks have been held with US companies and the US Defense Department to advance the deals without requiring Israel to pay the full amount immediately. The sides have discussed deferring some payments until 2030 under terms considered reasonable for Israel, including interest.
However, there has been no progress, and the sides have not reached an agreement.